Fire Fraud

Insurance Defense Lawyers Assisting Clients in Traverse City and Grand Rapids

Sometimes a policyholder commits arson or fire fraud related to a property in Michigan, while on other occasions, a third party attempts to defraud an insurance company by claiming a fire when there was none. It is difficult to sustain a ruse related to arson or fraudulent fires. Our insurance defense attorneys are knowledgeable about fires and their causes, and we work with capable experts. The Neumann Law Group can provide knowledgeable insurance defense. Our principal, Kelly Neumann, is a Grand Rapids and Traverse City fire fraud lawyer who can put her insights related to plaintiffs’ claims to work for your insured.

Exposing Fire Fraud

Fire fraud involves home or business owners who set fire to property for the purpose of obtaining insurance money to pay off a loan or mortgage. This may seem like a smart and enticing solution to the many people who owe more on a mortgage than what a home or commercial property is worth, or when a natural disaster has occurred. In most cases, there is only coverage for “occurrences” or accidents. There may be coverage if an arsonist sets fire to the property.

However, when someone sets a fire on purpose or hires another person to do so, criminal charges may be brought, and an insurance company should not need to pay. A notable percentage of arson cases are motivated by a desire to get money from an insurer. The true origins of fires may be determined through a careful investigation, even in cases in which property owners go to a great deal of trouble to disguise the crime. For example, a homeowner who burns down their own house may take the trouble to take out the furniture.

Since an uptick in arsons in 2011, during which there were 10,552 arsons or suspicious fires, Michigan has enacted laws that harshly penalize people convicted of arson. These amended laws have increased the maximum prison sentence for first-degree arson, arson of an insured dwelling when fraud is the intent, and maliciously starting fires in mines. In addition to prison time, a person who commits arson of an insured property when fraud is the intent faces a potential fine of up to $20,000.

In some cases, a third party attempts to defraud an insurance company by bringing a false claim of fire negligence against the policyholder or named insured. If this happens in Grand Rapids or Traverse City, our knowledgeable fire fraud attorneys can conduct a careful investigation on behalf of the policyholder or defendant. In most cases, an expert investigation coupled with a police investigation will shed light on the cause or causes of a fire.

However, fire fraud may be very sensitive in the insurance defense context. As insurance defense attorneys, we can defend under a reservation of rights or as independent counsel. Generally, the insurer’s duty to defend is broader than the duty to indemnify, and if a complaint alleges facts that trigger the obligation to defend, the insurer is required to appoint qualified counsel. However, we are aware that unpled but known facts may negate coverage. This may present an issue if we become aware that the insured has committed fire fraud. Our attorneys are careful to meet our legal obligations to the insured, while also maintaining high ethical and professional standards and duties.

Consult a Fire Fraud Lawyer in the Grand Rapids or Traverse City Areas

Fire fraud presents unique challenges in the context of insurance defense. It is crucial to retain an attorney who has experience navigating the tripartite relationship and can also provide a strong defense should the matter proceed to trial. If you owe your insured a strong and qualified Traverse City or Grand Rapids fire fraud attorney, we may be able to assist you. Our West Side of Michigan firm represents clients in Detroit, Lansing, Ann Arbor, Flint, Petoskey, Warren, Holland, Muskegon, Midland, Kalamazoo, Wyoming, and Saginaw, as well as areas throughout the Upper Peninsula. Contact the Neumann Law Group at 800-525-NEUMANN or via our online form to set up an appointment with an arson attorney.